Correct Answer:
B. Mudarabah
In Islamic business, when one person invests capital and another offers their services and expertise, this partnership is known as Mudarabah. The capital provider (Rabb-ul-Maal) bears the financial risk, while the working partner (Mudarib) contributes labor and management. Profits are shared according to a pre-agreed ratio, and any losses are typically borne by the capital provider, unless caused by the Mudarib's negligence or misconduct.
- Musharakah is a partnership where all partners contribute both capital and labor, sharing profits and losses.
- Riba refers to interest or usury, which is prohibited in Islamic finance.
- Salam is a contract where payment is made in advance for goods to be delivered at a future date.